China's Shanghai Pharma group to buy Australian Vitaco pharma

The Chinese group would buy all of the firm at a valuation of A$2.25 per share, a 28 percent premium to their closing price on Wednesday

Singapore: Chinese drugmaker Shanghai Pharma and private equity firm Primavera capital recently announced their plans to buy Australia's Vitaco pharma for approx. $239 million. The deal will help Vitaco grow in China, where the market for vitamins and dietary supplements is expected to surge to around $20 billion by 2018, according to Euromonitor.

Vitaco said in a statement on Thursday the Chinese group would buy all of the firm at a valuation of A$2.25 per share, a 28 percent premium to their closing price on Wednesday, less than a year after it listed shares in Sydney at A$2.10 apiece.

The Australian vitamins group (VIT) said its board unanimously recommended the all-cash $313.7m offer from Shanghai Pharma and its partner, Chinese private equity firm Primavera Capital, in the absence of a superior bid coming forward.

Though China remains a major destination for Australian goods, the growing uncertainty in the Chinese market along with tightening of regulations on imports has affected the business outlook for some players. Uncertainty reigned in the vitamins market in April as new tax rules for cross border e-commerce were announced in the world's second-largest economy.